City Telecom (NASDAQ:CTEL) surged 8.5% last Friday with large underlying volume, but the size of the rally was highly unusual. More upside is possible given that the stock hasn't reached theoretical highs yet, but downside risk is certainly on the rise.
Simcere Pharmaceutical Group (NYSE:SCR) advanced 18% in the past three trading days while the market went south, suggesting there is real buying power behind the stock. This stock is very similar to City Telecom (NASDAQ:CTEL) from a technical point of view.
Sound earnings helped propel Home Inns & Hotels Management (NASDAQ:HMIN) higher but the size of the jump is unusual. Yet when a stock can fight a bear market is very encouraging, suggesting more upside is possible should market sentiment improve.
Solar stocks gave back most of earlier gains last week. Solarfun Power Holdings (NASDAQ:SOLF) fell the hardest in relative terms but Trina Solar (NYSE:TSL) got severely punished as well. The good news is that the tumble looks so severe that a quick bounce back is a real possibility should overall market sentiment improve.
The moment of truth is coming for Rino International (NASDAQ:RINO) this week, the company is going to report quarterly financials. For now, investors sold it off, but that might change. right now the stock presents a huge upside potential should numbers be all right.
China TransInfo Technology Corp. (NASDAQ:CTFO) fell hard on disappointing financials. History has taught us that it takes quite some time before these stocks gain a foothold again.
Overbought A technical condition that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp advance from $15 to $30 in 2 weeks might lead a technician to believe that a security is overbought. Or, a security is sometimes considered overbought when the stock is trading out of its trading envelope and is approaching the theoretical high. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely infers that the stock has risen too far too fast and might be due for a pullback.
Oversold A technical condition that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp decline from $30 to $15 in 2 weeks might lead a technician to believe that a security is oversold. Or, a security is sometimes considered oversold when the stock is trading below its trading envelope and is approaching theoretical lows. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.